Warner Music Group – Gigaomhttp://gigaom.com
The industry leader in emerging technology researchThu, 08 Dec 2016 20:14:32 +0000en-UShourly1Rewire and experiment: why complex IT is betterhttp://gigaom.com/2013/06/19/rewire-and-experiment-why-complex-it-is-better/
http://gigaom.com/2013/06/19/rewire-and-experiment-why-complex-it-is-better/#commentsWed, 19 Jun 2013 17:05:11 +0000http://gigaom.com/?p=659067For older companies that want to adapt to shifting markets and consumer demand, legacy IT departments are a huge weakness. Composed of fragile islands coupled together, old IT systems must be handled slowly and gently to prevent a cascade of failures — with the result that their companies struggle to keep up with more nimble competition.

According to Jonathan Murray, the EVP and CTO of Warner Music Group, the solution is to replace older systems with what he calls “the composable enterprise” — a structure that’s complex and resilient, in which parts can be torn down and reassembled on the fly in order to meet current business demands.

Speaking at GigaOM’s Structure 2013 in San Francisco, Murray explained that cost was a traditional constraint on building IT systems; every piece of compute and memory was expensive, meaning that companies had to carefully plan every tiny allocation and did not have the luxury to experiment.

“The design blueprint was based on scarcity. Everything was expensive. CIOs had to squeeze out every ounce of efficiency,” he said.

Now, however, Murray says the economics of cloud architecture offer an opportunity for firms to create elaborate new systems and tinker on the fly. In doing so, IT professionals have to overcome a long-ingrained urge to fight complexity and instead develop decoupled eco-systems in which applications don’t depend on platform layers.

Murray also said IT departments must stop acting like labor-intensive craft teams and become like highly automated factory floors; this means, for example, ceasing to spend money on legions of employees who take care of legacy Unix systems.

The final goal, according to Murray, is for CIOs to stop regarding cost control as the paramount metric — and instead recognize that time to value is the most important unit of IT performance.

Check out the rest of our Structure 2013 coverage here, and a video embed of the session follows below:

A transcription of the video follows on the next page
]]>http://gigaom.com/2013/06/19/rewire-and-experiment-why-complex-it-is-better/feed/2Bronfman: Spotify is a real and growing revenue streamhttp://gigaom.com/2012/01/31/bronfman-spotify/
http://gigaom.com/2012/01/31/bronfman-spotify/#commentsTue, 31 Jan 2012 22:01:57 +0000http://gigaom.com/?p=478898Warner Music Group Chairman Edgar Bronfman, Jr. is a big fan of Spotify. In fact, at the D:Dive Into Media conference, the music mogul touted the music streaming service as a complementary service on top of other sales channels.

In what is likely his final interview before leaving Warner Music, Bronfman defended Spotify’s ability to drive more value for artists and labels. “Everywhere we look, Spotify is incrementally positive,” Bronfman said. Later in the discussion he noted that the streaming music startup is “a real and growing revenue stream.”

That said, Bronfman noted that part of the success comes from a deal that Warner Music helped to negotiate that passed on more value to labels and artists. “They have Warner Music to thank for a much better economic deal. We insisted on a much stronger deal and refused to sign unless we got that deal,” he said.

In addition to adding additional incremental revenue to the music industry, Bronfman said that Spotify’s model also provides longer-lasting value than some of the other offerings on the market, because consumers access music for longer periods of time than during the usual sales cycle.

“It’s important to note that [Spotify] has a much longer shelf life than downloads,” he said. “In Spotify, a song can live in the streaming world for a long time.”

Bronfman was not as keen on other platforms for distributing music. For instance, unlike all the other major labels, Warner Music doesn’t participate in streaming video service Vevo. “We have a fundamentally different strategy,” Bronfman said. “Vevo aggregates artist content and accrues that value to something called Vevo… We aggregate our content and accrue that value to our artists.”

As for Google Music, (s GOOG) which Warner Music also doesn’t participate in, Bronfman said, “Google has to decide if it wants to have a content platform and if it wants to have a platform that’s competitive with other content platforms.”

The top line from WMG’s Q3 earnings today is “Digital revenue approaching half (47.6 percent) of U.S. Recorded Music revenue.”

A 13 percent growth in global digital income to $203 million helped push overall revenue up 5.2 percent to $686 million. Sold to Access Industries on July 20, WMG took $12 million from Limewire’s $105 million industry settlement. Net loss improved to $46 million. Bronfman Jr told investment analysts…

“Whilst we steadfastly refuse to call the bottom, because I’m not a clairvoyant, regardless of the positive physical trends in the US in last six months, when you look at our digital revenue, as that becomes even a larger part, it will begin to outweigh declines of physical.

“You can see the turn in the US coming. Europe is anything from 18 to 24 months behind that, but it is inexorable. All of that has happened pretty much up against one business model, which is digital downloads, and pretty much one digital downloads provider (iTunes) overwhelming everyone else.”

Of course, an acceleration in physical’s decline rate will help get us to the tipping point just as much as digital growth will.

But the thing to take Bronfman there – new models like unlimited access, mobile and streaming. For all the kerfuffle about how WMG was supposedly the main sticking point to Spotify’s U.S. launch, Bronfman Jr, who wants to ween WMG off iTunes, has long been the biggest cheerleader for these new models, including Spotify – as long as they can give labels sufficient income through their paid subscription services.

“It’s something we have been calling for and has taken much longer, frankly, than anyone would have hoped,” Bronfman Jr said today.

“(There are) many new digital business models and services – with the advent of the cloud, you’re going to see significantly broader music service introduction, strategic distribution and, I hope, a reacceleration of overall digital growth beyond the growth of digital downloads, which is what the industry has really been living on since their introduction in 2004.”

Asked about Spotify specifically, he showed none of the reluctance which he is often characterised as exhibiting last year.

“We’re very pleased with the arc of Spotify’s growth. Their traction has been very encouraging. We’re very pleased with the progress so far,” he said.

“The kinds of levels that Spotify is achieving in Europe with regard to moving free users to premium paid subscriptions is also encouraging.

“If that keeps up, they will be a very profitable company themselves and will generate significant profit to Warner and the industry.”

All of which makes the method by which such services pay labels particularly intriguing, since this increasingly is no longer a per-track-download world.

“We receive a certain percent of the revenues from Spotify and a certain percentage based on a per-stream rate from Spotify,” Bronfman Jr said. “That industry pool is then apportioned on a share rate based on what’s being streamed on the Spotify service. Spotify pays advances which we recoup against the revenue that is earned.”

The CEO cited a “strict confidentiality agreement” precluding him from talking about iCloud terms, but: “We have a retail-wholesale agreement for iCloud that is not dissimilar to the way it works for download,” he said.

U.S. downloads of individual tracks (ie. iTunes Store sales) have flatlined. That’s why labels are seeking new models. Not even lowering track prices has worked. “Where we have lowered price on songs to $0.69, it has not driven any real increase in volume,” Brondman Jr said. “If you don’t particularly want a song there’s not a price at which you’re gonna buy it.”

]]>http://gigaom.com/2011/08/04/419-wmg-loves-spotify-and-sees-music-riding-the-cloud-to-digital-tipping-po/feed/3Access Industries Closes $3.3 Billion Purchase Of Warner Music Grouphttp://gigaom.com/2011/07/20/419-access-industries-closes-3-3-billion-purchase-of-warner-music-group/
Wed, 20 Jul 2011 22:02:55 +0000http://paidcontent.wp.gostage.it/2011/07/20/419-access-industries-closes-3-3-billion-purchase-of-warner-music-group/Warner Music Group’s sale to Access Industries has been completed for $8.25 per share in cash, or $3.3 billion. The record label’s board approved the deal two weeks ago.

WMG will be part of Airplanes Music, a division of Access Industries, the diversified business group owned by Russian-American industrialist Len Blavatnik, whose $3.3 billion offer in May represented a 34.4 percent premium over the record label’s average half-year price of $6.14.

The company will remain named and located as is, but Access will take WMG off the stock market. The brief statement about the deal’s closing did not say whether CEO Edgar Bronfman Jr. will stay aboard. As it stands right now, Bronfman is still the head of the company, but again, that could change.

With WMG done, the focus will shift to what will happen with EMI Group, which began exploring a sale in June. Citigroup and Access Industries are both vying for EMI. For Access Industries, the addition of another record label, considering the weak state of the record business, may seem crazy, particularly the premium he paid for WMG. But Blavatnik seems to feel he would be able to find some value after some heavy cost-cutting while continuing to market a roster that so far includes big names like Bruno Mars, R.E.M., Cee Lo Green and Lupe Fiasco.

In terms of what Blavatnik is getting with WMG, in May, the company reported that Q1 losses grew amid anemic revenue gains. Meanwhile, digital now makes up more than 30 percent of the labels revenues — a combination of the decline of physical CD sales and, to be fair, an reasonably aggressive focus on building up its online and mobile distribution.

WMG is scheduled to have its last quarterly earnings report on Aug. 1, as it is being delisted from the NYSE now that it is operating within a private company. But that Q2 report might or might not happen, though WMG still has bondholders it has to report to, but it’s not clear if that will be done through the standard quarterly report.

]]>EMusic Reaches A Deal With EMIhttp://gigaom.com/2011/05/19/419-emusic-reaches-a-deal-with-emi/
Fri, 20 May 2011 01:00:59 +0000http://paidcontent.wp.gostage.it/2011/05/20/419-emusic-reaches-a-deal-with-emi/eMusic, the online music “club” that offers members discounts on tracks in exchange for a monthly subscription fee, has struck a deal with a fourth major music label to add tracks to its catalogue. eMusic says its members can now access more than 15,000 albums from EMI.

This is the fourth deal with a major label eMusic has reached over the last year-and-a-half; it signed a deal with Universal Music Group in January and had reached deals with Sony (NYSE: SNE) and Warner Music Group (NYSE: WMG) in late 2009 and early 2010, respectively.

The deal is part of eMusic’s ongoing effort to remake its service. While it was initially focused primarily on independent music, eMusic has sought to widen that selection by reaching deals with all of the major labels. That has angered independent labels and prompted some of them to pull their albums last fall, saying eMusic had changed the terms of their deals with the company.

As for the specific terms of the EMI arrangement, only the label’s catalogue of albums 12 months or older will be available to eMusic’s members. That’s similar to the deals EMI had reached with the other big labels.

]]>Mobile Lowdown 5-19-11: Apple Cloud, EMI; VZW Sues FCC; Latest Gartner Figshttp://gigaom.com/2011/05/19/419-mobile-lowdown-5-19-11-apple-cloud-emi-vzw-sues-fcc-latest-gartner-figs/
Thu, 19 May 2011 15:24:11 +0000http://paidcontent.wp.gostage.it/2011/05/19/419-mobile-lowdown-5-19-11-apple-cloud-emi-vzw-sues-fcc-latest-gartner-figs/Our look at some of the big stories in mobile today: Apple’s apparently getting closer to a cloud music product after signing a deal with EMI; Verizon Wireless (NYSE: VZ) goes after the FCC in court over data roaming rules; Gartner and Millennial Media release their latest figures respectively on mobile sales and on mobile ad impressions; Apple (NSDQ: AAPL) celebrates 10 years of retail and steps up its bid to make the SIM even smaller.

— Apple/EMI: The arrival of a cloud-based music service from Apple looks like it might really be around the corner now. After many months of negotiations, Apple has long last inked a deal with EMI over streaming music, and has nearly completed similar deals with Sony (NYSE: SNE) Music and Universal Music Group, according to a report in CNET, citing unnamed sources in the music industry. Apple apparently already has a deal in place with Warner Music Group (NYSE: WMG) — although that has not been confirmed by either company. If true, this would help Apple steal a march on Google (NSDQ: GOOG) and Amazon (NSDQ: AMZN), which have also been looking to launch cloud-based music services, but have yet to ink the requisite licensing deals with the major operators.

— Verizon Wireless: The U.S.’s biggest wireless operator has filed a lawsuit against the Federal Communications Commission over the regulator’s rules on mobile data roaming. The operator alleges that getting involved in mandating roaming agreements (and potentially pricing) is outside the FCC’s mandate. The suit, filed in the U.S. Circuit Court of Appeals in Washington, D.C., is the same court where Verizon filed its suit over the FCC’s net neutrality rules (a case that has, for now, been overturned on a technicality). Smaller, rural operators, predictably, are coming out in favor of the FCC in this case. (via Washington Post and Total Telecom)

— Mobile sales stats: The transformation of power players in the mobile device market continues apace. According to Q1 figures out from Gartner today, the top three handset makers worldwide in terms of unit sales (not value) — Nokia (NYSE: NOK), Samsung and LG (SEO: 066570) — all lost market share compared to the same quarter a year ago; while the next four — Apple, RIM (NSDQ: RIMM), ZTE and HTC — all gained or stayed level (RIM was the exception in that group, keeping the same market share). Despite this, at 25.1 percent, Nokia still represented a quarter of all handset sales. Among smartphones, Android was the most-sold platform, representing 36 percent of all unit sales; while Symbain took a 27.4 percent share and iOS took 16.8 percent.

— Millennial Media: As you would expect for a platform that is performing the best in terms of unit sales, Android also topped the list for Millennial Media’s latest figures for impressions on its mobile ad network. It took at 53 percent share of all impressions.

— More Apple: A look from ZDNet at how the media and analyst community totally missed the importance of Apple’s retail store strategy when the company fist launched it ten years ago; while Apple steps up its strategy to make the SIM — and therefore its mobile devices — even smaller, by filing an application with the European telecoms standards body ETSI, and getting the backing of mobile operator Orange for the project — surely a route preferable making “soft sims” and cutting out the operator altogether.

]]>As WMG Prepares For Handover, Digital Now More Than 30 Percent Of All Saleshttp://gigaom.com/2011/05/10/419-as-wmg-prepares-for-handover-digital-now-more-than-30-percent-of-all-sa/
Tue, 10 May 2011 18:35:59 +0000http://paidcontent.wp.gostage.it/2011/05/10/419-as-wmg-prepares-for-handover-digital-now-more-than-30-percent-of-all-sa/Warner Music Group’s losses widened and revenues were up slightly in Q1, the company’s next to last quarter before it gets taken over by part-shareholder Access Industries, the diversified group owned by Russian-American industrialist Len Blavatnik, whose offer of $3.3 billion in cash (at $8.25 per share, a 34.4 percent premium over WMG’s average half-year price of $6.14), was accepted last week. But the other big news from WMG’s Q1 is that digital is now over 30 percent of all sales.

Digital revenue was $220 million, or 32 percent of total revenue, up 9 percent from last year. The company saw improvement across in global digital downloads and streaming. However, that growing strength was partially offset by further declines in global mobile revenue.

In a sign of the industry’s anemic sales picture overall, revenue from WMG’s Recorded Music segment was up 2.2 percent, despite the good year by label artists Bruno Mars, R.E.M., Cee Lo Green and Lupe Fiasco. Within that category, digital revenue was $205 million, a 6.8 percent gain. Digital was 37.3 percent of total Recorded Music revenue in Q1, up slightly from Q110’s 35.7 percent share of the segment’s business. More to come

]]>Warner Music Sale Could Herald New Digital Outlookhttp://gigaom.com/2011/05/06/419-warner-music-sale-could-herald-new-digital-outlook/
Fri, 06 May 2011 19:19:00 +0000http://paidcontent.wp.gostage.it/2011/05/06/419-warner-music-sale-could-herald-new-digital-outlook/The winning bidder for Warner Music Group (NYSE: WMG) (WMG) is part-shareholder Access Industries, the diversified group owned by Russian-American industrialist Len Blavatnik, whose offer of $3.3 billion in cash (at $8.25 per share, a 34.4 percent premium over WMG’s average half-year price of $6.14) has been approved by WMG directors and recommended to shareholders.

The company will remain named and located as is, but Access will take WMG off the stock market. The companies’ announcement does not state whether CEO Edgar Bronfman Jr. will stay aboard.

He led the $2.6 billion investor buy-out from Time Warner (NYSE: TWX) in 2004 – now he and the investors Thomas H. Lee Partners and Bain Capital, who together own 56 percent 56 percent of the company, “have agreed to vote their shares in favor of the merger”, the announcement says.

What does this mean for WMG?

In digital right now, Warner is at once both innovative and conservative. On the one hand, its technology teams have overhauled the way the label approaches online artist marketing, for instance by transitioning to the free Drupal content management system.

But WMG also plays hard ball in licensing digital services. It refused to renew Last.fm’s license to use its music, has still not permitted Vevo to use its artists’ music videos, has decided not to license purely free ad-supported digital distributors and, during the heyday of the music video game boom, chastised game publishers for paying too little in royalties.

These insistences, which come straight from the top and Bronfman Jr., have made it amongst the most invisible of the four majors on such third-party online services. On the face of it, the ownership change may do little to change that, if the leadership does not change.

But tea leaves which can be read in the announcement suggest all sides are cognisant of need for step-change…

WMG CEO CEO, Edgar Bronfman, Jr: “(Access) are supportive of the company’s vision, growth strategy and artists, while bringing a fresh entrepreneurial perspective and expertise in technology and media.”

Access’ media head Jord Mohaupt: “The music industry is at an inflection point where digital adoption is rapidly gaining momentum. Warner Music, as one of the most progressive forces in the music business, is well positioned to capture this opportunity for music creation and distribution.”

Bronfman Jr. has spoken frequently of his fondness for emergent new music consumption models like unlimited subscription access and mobile, with several new players arriving that may reduce iTunes Store’s dominance of the space and, therefore, labels’ dependence on Apple.

Last month, former WMG technology chief Ethan Kaplan wrote that labels should now abandon physical formats, on which they still rely for the majority of their revenue. In WMG’s case, its global digital revenue hit 24 percent of its total in the holiday season quarter. But, in the U.S., the trade value of recorded digital music sales last year tied with physical, according to IFPI, and was set to exceed it this year, suggesting a big domestic tipping point.

NYT: “Many consider Mr. Blavatnik’s next step to be an attempt to combine Warner Music’s record-music arm with that of the EMI Group, which Citigroup currently owns after foreclosing on its previous owner.”

]]>WMG Digital Revs Rose Weakly Amid Wider CD Sales Declineshttp://gigaom.com/2011/02/08/419-wmg-digital-revs-rose-weakly-amid-wider-cd-sales-declines/
Tue, 08 Feb 2011 19:46:26 +0000http://paidcontent.wp.gostage.it/2011/02/08/419-wmg-digital-revs-rose-weakly-amid-wider-cd-sales-declines/Warner Music Group (NYSE: WMG) didn’t get much of a boost from the all-too-important holiday season last quarter. There were, of course, the inevitable shrinking of physical CD sales. And although digital’s share of revenues grew — in part because CD sales are less and less a part of the mix — the revenue growth both domestically and internationally appeared to be fairly anemic. All in all, WMG’s results were still not as bad as analysts had anticipated. More to come

Highlights from the quarter included:

— Total digital revenue was $187 million, or 24 percent of total revenue, up 2 percent, year-over-year. (WMG reports these results as fiscal Q1, not Q4)
— Sequentially, total digital dollars fell 5.1 percent from fiscal Q4.
— Revenue from the company’s Recorded Music business declined 14 percent
— Recorded Music digital revenue was $178 million and grew 3.5 percent YOY. It represented a 26.4 percent slice of total Recorded Music revenue pie, compared with 22 percent in the prior-year quarter.
— International Recorded Music digital revenue grew 12.3 percent o to $82 million, accounting for 19.7 percent of that segment’s total sales, compared with 14.6 percent during the same period last year.
— Although it didn’t spell it out, digital revenue growth was held down by mobile revenue declines, even internationally. That’s particularly troubling since music labels had been hoping the continued rise of smartphones would help provide a shot in the arm to the business.
— Another former strong segment, Music Publishing, saw revenue sink 14.9 percent during the quarter. Digital revenue from Music Publishing fell to $11 million, down 26.7 percent. The blame was pinned on the timing of “cash collections.”